Question

Identify & explain the concept from the given illustration

Kiran’s demand for milk remained unchanged even when its price increased by 10%. 

Answer 1

Concept: Perfectly inelastic demand

Explanation:

1. When a percentage change in price has no effect on the quantity demanded of a commodity, it is called perfectly inelastic demand. 
2. Since rise in the price of milk by 10% had no effect on Kiran’s demand for milk, this illustration is related to the concept of ‘perfectly inelastic demand.’